Automobile Industry in India

Driving the most luxurious car has been made possible by the stiff competition in the automobile industry in India, with overseas players gathering the same momentum as the domestic participants.

   
Every other day, we have been hearing about some new launches, some low-cost cars - all customized in a manner such that the common man is not left behind. The CAGR of the Indian automotive industry’s sales between FY 2009 and FY 2020 comes around 8%. The vehicle registrations fell by 29% in the financial year 2020-2021 from 295.8 million registered vehicles to 221.85 million in 2020.

The automobile industry in India was the fifth largest in the world in 2020. Several Indian automobile manufacturers have spread their operations globally as well, asking for more investments in the Indian automobile sector by the MNCs.

Potential of the Automobile industry in 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan Motors plans to export 250,000 vehicles manufactured in its India plant by 2011. Similar plans are for General Motors.

Segmentation of market share of automobile industry in India

Passenger Vehicle: 13%
Commercial Vehicle: 3%
Three-wheelers: 3%
Two-wheelers: 81%

Top Automobile Companies in India

Tata Motors

Tata Motors is the largest automobile manufacturing company in India. Established way back in 1945 Tata Motors is a multinational automobile company with its headquarters in Mumbai. Previously known as Telco TATA Engineering and Locomotive Company Tata Motors belongs to Tata Group. This company manufactures compact medium-sized utility vehicles. Over the last few decades, it has stood as the undisputed leader in the commercial vehicles segment. It is also the third-largest producer of passenger cars in India. This automobile company in India is listed on both the Bombay Stock Exchange and the New York Stock Exchange. The revenues earned by Tata Motors in 2020 accumulated to 34.7 billion USD. Some of the well-known cars manufactured by Tata Motors are Tata Indigo, Tata Indica, Tata Sumo, Tata Indigo Marina and Tata safari.

Hindustan Motors Limited

Hindustan Motors Limited was founded in the year 1942 by B.M Birla. It is an operative subsidiary of the Birla Technical Services group. This company held the title of the biggest manufacturer of cars in India before Maruti Udyog. Hindustan Motors was the pioneer in manufacturing automobiles in India. The company accounted for a sales turnover of Rs 39,136 crore in 2020. They saw a 1.4% increase in revenue. Some of the important cars and multi-utility vehicles manufactured by Hindustan Motors Limited include; Mitsubishi Lancer, Trekker, Contessa, Ambassador, Porter, Pushpak and Mitsubishi.

Ashoke Leyland

Ashok Leyland is a leading commercial vehicle manufacturer in India. It was established in 1948. The company over the years has become synonymous with the production of trucks, passenger buses and emergency military vehicles. It happens to be the second-largest commercial vehicle producer in India holding a market share of almost 30 per cent. The company holds a record for selling almost 60, 000 vehicles and almost 7000 engines per year. Ashok Leyland accounted for consolidated revenues of Rs. 174.67 billion in 2020. Some of the popular products by this company are; Panther BS-II Multi-axle Vehicles, Cheetah Bus-III, Tractors and Ecomet, Lynx BS-II, Diesel and Natural Gas gensets from 15KVA to 250KVA.

Maruti Suzuki India Limited

Maruti Suzuki India Limited was established in 1981. A part of this company is owned by Suzuki Motor Corporation of Japan. It is the country's largest passenger car manufacturing company. Credited for having brought in the automobile revolution in the country, Maruti Suzuki India Limited was known as Maruti Udyog Limited till 2007. With its headquarters in Delhi, this automobile company in India happens to be the largest producer and market shareholder of cars. The company accounted for consolidated revenues of Rs. 71,690.4 crore in 2020. Maruti Suzuki India Limited has been credited for manufactures a variety of passenger cars, SUVs, and Sedans. Some of Maruti's most popular cars are Alto, Gypsy, Omni, Wagon R, Maruti 800, Versa, Zen, Esteem, Baleno and Swift.

Hyundai Motor India Limited

Hyundai Motor India Limited (HMIL) is owned entirely by Hyundai Motors of South Korea. Hyundai Motors happens to be the largest car manufacturer in South Korea and the sixth-largest in the world. This automobile company in India is also the largest passenger cars exporter in India. Established on May 6 1996 this company in a short period has taken the Indian automobile industry by storm. Some of the popular cars manufactured by this company are; Santro, Getz Prime, Hyundai i10, Hyundai i20 Accent and the Verna and Sonata

Bajaj Auto

Bajaj Auto is another important automobile manufacturing company in India. It is one of India's most trusted car manufacturers. It is an operative subsidy of the Bajaj Group. Bajaj Auto happens to be the largest two and three-wheeler manufacturer in India and also ranks in this field across the globe. This automobile company was established on 2 November 1945. The company was then known as M/s Bachraj Trading Corporation Private Limited. The company made a modest beginning by importing and then selling two and three-wheelers in India. Today Bajaj Auto has become synonymous with two and three-wheelers in the country. Some of its popular two-wheelers are; Pulsar 220DTS and Kawasaki Ninja 250R.

Indian Automobile Industry SWOT Analysis

Strengths
  • The domestic market is large
  • The government provides monetary assistance for manufacturing units
  • Reduced Labour cost
  • Evolving industry
  • Continuous product innovation and technological advancement
  • Growth shifting to Asian markets
  • Increase in demand for luxury commercial vehicles
  • Manufacturing facilities in Asian nations to control cost

Weaknesses
  • Infrastructural setbacks
  • Low productivity
  • Too many taxes levied by the government increase the cost of production
  • Low investments in Research and Development

Opportunities
  • Reduction in Excise duty
  • Rural demand is rising
  • Income level is at a constant increase
  • Introducing fuel-efficient vehicles
  • Changing lifestyle and customer demand causing a rise in the sale of two-wheelers and compact cars

Threats
  • Increasing rates of interest
  • Too much competition
  • The rising cost of raw materials
  • Steeply rising fuel prices
  • Slow economy
  • Economic recession
  • High fixed costs and investments

Automobile industry facts and statistics

  1. India was the fifth-largest automobile market in the year 2020.
  2. The financial year 2021 statistics:
    1. Passenger vehicles: 27.11 lakhs
    2. Commercial vehicles: 5.69 lakhs
    3. Three-wheelers: 2.16 lakhs
    4. Two-wheelers: 151.79 lakhs
  3. Fiat Chrysler invested 250 million dollars in January 2021.
  4. Tesla, the electronic car manufacturing company has registered offices in Bangalore and has shown interest in starting a unit in India.
  5. In the 2022-2022 union budget the government introduced the voluntary vehicle scrappage policy. This policy will boost India’s demand for new vehicles and remove the old and polluting vehicles off the streets.
  6. Delhi government has ordered the construction of 100 battery charging points across the state. This is to promote the sale of electrical vehicles in the capital.

The automobile industry in India is a growing industry that shows promise and is necessary for the nation’s economic and technological advancement.

The availability of low-cost skilled labour, various research and development centres, and easy cheap steel production all help make India the viable choice.

India is a growing economy and is a lucrative opportunity for investors.

Automobiles Industries in India
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